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DEPARTMENT OF STATE LANDS

 

DIVISION 71

ONSHORE MINERALS PROSPECTING AND LEASING RULES

141-071-0400

Purpose

The purpose of these regulations is to prescribe uniform procedures for obtaining and conducting operations under mineral prospecting permits and mining leases covering onshore state-owned lands and mineral rights under the jurisdiction of the Division of State Lands.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0405

Definitions

(1) "Division" means Division of State Lands.

(2) "Director" means the Division Director.

(3) "Mining claim" means as defined in ORS Chapter 517.

(4) "Mining lease" means the completed lease following the form adopted by OAR 141-071-0690.

(5) "Lands" means the state-owned lands as listed in the Registry of Mineral Rights for which the Division may execute mining leases under ORS 273.780. (Certain minerals and lands are excluded by ORS 273 .785.)

(6) "Surface Rights" means all property rights and usage exclusive of the mineral estate or reserved mineral rights.

(7) "Valuable Minerals" those metallic minerals and uranium covered by these rules which have sufficient values to justify expenditure by a prudent man for development and extraction.

(8) "Commercial Quantities" those valuable minerals, as defined herein, which exist in sufficient amounts to justify expenditures by a prudent man for development and extraction.

(9) "Hard Mineral Resource" all state-owned metallic and non-metallic minerals except oil, gas and sulphur, geothermal resources and their by-products, and construction grades of rock, sand, and gravel.

(10) "Discovery" finding of one or more valuable minerals in commercial quantities.

(11) "Exploration" means electrical and electronic surveys, seismic, gravimetric, geochemical surveys, shallow core drilling, assay work, and other measurements of a like nature.

(12) "Registry" means the inventory of mineral rights established by the Division of State Lands pursuant to ORS 273 .790 listing lands owned by all state agencies in which mineral rights were transferred to the Division for leasing.

(13) "Operations Plan" means the planned series of measurements, tests, and surveys which a permittee expects to employ; multiple plan segments may be employed to allow sequence adjustments whenever data warrants.

(14) "Qualified Applicant" means any United States citizen of legal age, or any firm, association, or corporation which is qualified to do business in the State of Oregon and is not in default under the laws of the State of Oregon relating to qualifications to do business within this state; and governmental units, including without limitation, municipalities; provided, that no member of the State Land Board or employee of the Division of State Lands may take or hold a lease upon state-owned mineral rights.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0410

State Land Board Policy

In order to more fully manage the mineral rights in property owned by any state agency as directed by ORS 273 .780, the State Land Board adopts the following program policies:

(1) The Division's program should provide for environmental protection on a parcel-by-parcel basis, protect the long-term use of surface rights, and obtain an equitable return to the proper state fund.

(2) Mining production leases shall be issued on the following terms: $1 per acre per year; royalty rate of 5 percent for most metallic minerals; escalating development expense from $1 per acre per year to $3 per acre after the third year; and ten year primary term on leases covering a maximum of 640 acres.

(3) Competitive bidding should be utilized to obtain the highest available return from discovered mineral occurrences.

(4) Lease applications which include assay valuations in excess of $100,000 shall be subject to final approval by the State Land Board.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

General Conditions

141-071-0420

Fees and Service Charges

The Division shall collect nonrefundable service charges to cover the expense of processing the following matters:

(1) Original application -- $50 for each lease or permit.

(2) Assignment -- $25 for each assignment.

(3) Mineral prospecting permit fee -- $.50/acre annually.

(4) Renewal prospecting permit fee -- $5/acre annually.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0425

Insurance

Prior to any operations on state-owned land, permittees and lessees shall provide evidence of insurance as follows:

(1) Public liability of $100,000, $300,000 and property damage of $100,000, including fire coverage; and

(2) Contractual liability covering the permittee's or lessee's duty of indemnification of the state -- $200,000. The State of Oregon, the Division of State Lands, and the appropriate surface-owing agency shall be named as co-insured; or

(3) Self-insurers -- In lieu of required types and amounts of insurance coverage an applicant or lessee may provide a certified balance sheet for a segregated self-insurance fund showing net worth of liquid assets in amounts equal to or exceeding the required insurance coverage.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0430

Bonds

Applicants for permits or mining leases shall furnish corporate surety bonds in amounts and with sureties acceptable to the Division. Bonds will be conditioned on compliance with all the terms of the permit or lease.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0440

Reservations

(1) The Division may withdraw any mineral rights from availability for exploration or leasing at any time prior to receipt of notice of a discovery. Withdrawals based on applicants' environmental reports or state investigation shall be subject to appeal under ORS Chapter 183.

(2) The Division reserves the right to conduct competitive bid sales on lands not subject to preference rights or otherwise encumbered, whenever deemed necessary on or nearby discovered mineral occurrences.

(3) The Division may refuse to grant a lease for state-owned mineral rights because of considerations of environmental quality or other public interest.

(4) The Division may, by agreement with interested parties, provide special rules, interagency agreements, compensatory development or other means which deviate from these mineral leasing rules where the statutes, rules, and regulations defining and implementing the dedicated purpose for which state-owned surface rights were acquired are in conflict with mineral rights exploration and development.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0445

Refunds and Withdrawals

(1) If an application for a Mineral Prospecting Permit is rejected, all checks tendered by applicant, except the filing fee, will be returned. If part of an application is rejected, per acre fees applicable to the rejected acreage will be refunded.

(2) Should an applicant desire to withdraw his application, the applicant must make a written request. If the request is received prior to the time the Division approves the application, all checks tendered by the applicant, except the filing fee, will be returned. If the request is received after approval, then, unless the applicant accepts the offered permit, all money tendered is forfeited to the state, unless otherwise ordered by the Director for good cause shown.

(3) Should an applicant desire to withdraw an application which has been filed under the simultaneous filing or competitive bidding rules, the applicant must make a written request. If the request is received before the public drawing or bidding, all checks tendered by the applicant, except the filing fee, will be returned. If the request is received after approval, then, unless the applicant accepts the offered lease, all money tendered is forfeited to the state, unless otherwise ordered by the Director for good cause shown.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0450

Records

Copies of all exploration data, including for example drilling logs, geochemical readings, and field notes, shall be deposited with the State Geologist within five years after performance of the work. If ongoing exploration work or lease performance warrants secrecy of such information, it shall be held under such conditions as the State Geologist and permittee or lessee may agree upon.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

Mineral Prospecting Permit

141-071-0455

Lands Subject to Permit

All state-owned lands and mineral rights under the Division's jurisdiction are available for prospecting except:

(1) Lands and mineral rights classified as containing commercially valuable mineral deposits; and

(2) Lands reserved for a Natural Area Preserve or otherwise withdrawn from exploration;

(3) Lands and mineral rights already subject to exclusive permit or lease. State-owned parcels not included in the State Minerals Registry but under the jurisdiction of the Division may be made available for minerals exploration by special arrangement.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0460

Mineral Prospecting Permit Required

No person shall conduct mechanized exploration operations on, in, or under land or mineral rights owned by the State of Oregon and under the jurisdiction of the Division without a permit or lease issued pursuant to these regulations. Casual prospecting, using hand tools, may be conducted without a Division of State Lands Mineral Prospecting Permit provided that the land surface is otherwise available for public access. Please note that state parks, state tree nurseries, streams, lakes, and waterways are made unavailable or require additional permits under other state agency regulations.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0465

Application for Mineral Prospecting Permit

Any qualified applicant wishing to obtain an original, amended, or renewal mineral prospecting permit from the Division shall submit at least two copies of a mineral prospecting application on a form provided by the Division together with the required fees. All such forms shall be completed in full, signed by the applicant of his (its) authorized representative with proof of authorization, and shall include two copies of all necessary exhibits. Maps shall be in reproducible form. The Division may require submission of such other information as it deems necessary to make a decision on granting, modifying, or denying the permit.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0470

Priority

Applications will be accepted in the order received and priority of permit issuance will be established on the same basis except as provided in the case of simultaneous filings.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0475

Application Approval

(1) Upon receipt of a mineral prospecting permit application, the Division shall cause copies of the application to be sent to the surface rights holder and affected state agencies, including the Department of Environmental Quality, Department of Geology and Mineral Industries, Public Utility Commissioner, State Fish and Wildlife Commission, Department of Energy, State Historic Preservation Office, and Land Conservation and Development Commission and to such other agencies or persons as the Division deems appropriate.

(2) Each agency shall be requested to respond within 30 days by making a recommendation as to whether the permit should be granted. Agencies may recommend conditions to be contained in the mineral prospecting permit to satisfy requirements within their respective statutory jurisdictions. Applicants will be advised of conditions recommended by state agencies and, where advisable, a conference between agencies and applicants will be held.

(3) The Division shall make such investigation as it considers necessary.

(4) The Division or any state agency holding the surface rights may refuse to grant a permit for exploration of mineral rights under the jurisdiction of the Division of State Lands if it has reason to believe that a mineral lease could not be issued because of considerations of environmental quality or other public interest.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0480

Mineral Prospecting Permit Terms

(1) Except for additions and modifications required to protect natural resources and environmental quality, the Division of State Lands Mineral Prospecting Permit form as adopted August 15, 1977, will be issued upon approval of a prospecting permit application. Prospecting Permits shall expire three years from date of issuance.

(2) In the event that a discovery is not obtained during the initial term of an exploration permit, the Division may agree to renew for an additional three year term provided:

(a) An exploration operations budget equal to or exceeding nine times the annual permit fee is submitted by the permittee together with an exploration plan approved by the State Geologist; or

(b) Applicant has commenced actual drilling prior to the expiration date of the initial term and agrees to continue with due diligence to reach a promising geologic structure; and

(c) Upon payment of a renewal annual permit fee of $5 per acre.

(3) Mineral Prospecting Permits allow exclusive use of the mineral estate (not exclusive as to the surface) but are not to be construed as a possessory right.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0485

Conversion

Upon discovery of valuable minerals in commercial quantities, the permittee shall immediately notify the Division in writing (giving sufficient detail to enable the Division or an impartial consultant to evaluate the discovery). Thereafter, for a period of sixty days, the Division will suspend action on the mining lease applications for lands or mineral rights within four miles of the discovery site. Mining lease applications by the permittee for state-owned land and mineral rights within the suspension zone will be given first priority if properly filed within the sixty days suspension period.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

Mining Lease

141-071-0490

Mining Lease Required

No person, association, or corporation shall dig, extract, mine, drill and sell, remove or dispose of any hard mineral resource in commercial quantities from state-owned land under the jurisdiction of the Division of State Lands without a lease issued under these rules.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0495

Availability

State-owned lands are available for mineral leases if:

(1) A certified or proven discovery has been made under an exploration permit; or

(2) A nearby discovery warrants inclusion of the state land in a unit agreement or in competitive bidding as provided in these rules; or

(3) The lands have been formally classified by the State Land Board, or the Division, for minerals leasing.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0500

Size of Leasable Tract

(1) Minimum -- Except for good cause shown, no minerals lease will be issued for a tract less than a quarter-quarter section (40 acres) or surveyed lot, which could be more or less than 40 acres, except where state lands within any quarter-quarter section or surveyed lot is less than the whole thereof, in which case the lease will be issued only on the entire area of state lands within such quarter-quarter section or surveyed lot.

(2) Maximum -- Upon certification of a discovery, the permittee shall be entitled to apply for four mineral leases of not more than 640 acres each of the land embraced in the exploration permit. The areas selected by the permittee/applicant shall be in compact form and shall conform to government surveys wherever possible.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0505

Application

Any qualified applicant wishing to obtain an original, amended, or renewal mining lease shall submit at least two copies of a written application on forms provided by the Division. The application must be completely filled out and duly signed by the applicant and be accompanied by the required fee and advance rental. Any false or willfully incomplete statement will be considered misrepresentation and may be cause for rejection. Any person purporting to act for an applicant in making application for a mining lease shall accompany the application form with a properly executed power of attorney or shall have same on file in the Division of State Lands.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0510

Receipt of Application

Applications for mineral leases will be received for filing in the office of the Division during office hours. Because lease priority is obtained only by discovery, drawing, or competitive bidding, time of receipt will be recorded in the same manner as other correspondence.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0515

Priority

A permittee under a current minerals prospecting permit shall obtain a preferential right to a minerals lease if:

(1) The permittee certifies that it has discovered a valuable mineral deposit and will obtain commercial production of a mineral or minerals; and

(2) The permittee completes the requirements of OAR 141-071-0505 and 141-071-0520.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0520

Application Supplement

The application priority afforded an applicant by OAR 141-071-0515, or awarded by means of simultaneous filing drawing, or competitive bidding shall be maintained provided that, within 120 calendar days following acceptance of the application form, the applicant submits the following supplemental information to the Division:

(1) An environmental impact report following the form adopted by the Division.

(2) When deemed necessary or advisable, the Division may require an applicant to submit copies of all technical data relied upon by the applicant as proof of discovery.

(3) A proposed plan for mined land reclamation (copy of Department of Geology and Mineral Industries Reclamation Permit application acceptable).

(4) Such other information as the Division advised the applicant to be necessary.

(5) Mining Lease applications may include a corporate surety bond of not less than $1,000, or, if not submitted at the time of application, must be provided prior to issuance of a mineral lease.

(6) The Division may require additional amounts of bonding from time to time during the lease term whenever the monthly proceeds from royalties exceeds 1/3 of the bond amount.

(7) Extension during exploration. The Division may grant an extension of time for submission of supplemental information whenever the applicant is proceeding under a valid mineral prospecting permit to determine the nature of the mineral resources included in the mineral lease application. Such extension(s) shall not exceed one year's time.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0525

Application Rejection

If application supplements are not received by the Division within the time limit specified in OAR 141-071-0520 or if such application supplements are not complete, the entire application shall be rejected and returned to the applicant with an explanation of the reasons for rejection.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0530

Application and Supplement Consideration

(1) Upon receipt of a lease application, the Division shall cause notice of the application to be sent to affected state agencies, including the agency having jurisdiction over the surface rights, the Department of Environmental Quality, Department of Geology and Mineral Industries, State Fish and Wildlife Commission, Land Conservation and Development Commission, Department of Energy, State Historic Preservation Office, and such other agencies or persons as the Division deems appropriate.

(2) Upon receipt of the environmental impact report, the Division shall send copies to the same affected state agencies.

(3) Each agency shall be requested to respond within 60 days of its receipt of the environmental impact report making a recommendation as to whether the lease should be granted to the applicant. Agencies may also recommend conditions to be contained in the lease to satisfy requirements within their respective statutory jurisdictions.

Applicants will be advised of conditions recommended by state agencies and, where advisable, a conference between agencies and applicants will be held.

(4) The Division shall make such investigations as it considers necessary and shall notify the public of its opportunity to request a hearing or hearings upon the granting of the application, together with the timetable and procedures to be followed. The Division will provide written notice to any person or organization which has requested in writing of the Division that such notices be provided to it directly.

(5) If the Division approves the application, and the state agency controlling the surface rights concurs, the application will be placed before the State Land Board for its final approval, when required by OAR 141-071-0410. Upon approval by the State Land Board, if required, the Division shall promptly forward to the applicant a mining lease incorporating all conditions which are deemed necessary by the Director, taking into consideration the recommendations of other affected agencies, the protection of natural resources, public health, and safety.

(6) The Division or Board may refuse to grant a lease for state-owned minerals because of considerations of environmental quality, inadequate cost-benefit ratio, or other public interest.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

Simultaneous Filing

141-071-0535

When Applicable

Upon an order of the Director, when he deems it necessary to insure competitive equity, the Division shall offer mineral resource rights for leasing by public drawing. Additionally, Prospecting Permit applications received for the same land or mineral rights in any single mail delivery shall be awarded priority by following OAR 141-071-0540(4) and (5).

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0540

Procedures

The following procedures shall be employed in leasing mineral resource rights by public drawing:

(1) A notice of the mineral resource rights available for leasing by public drawing shall be posted in the offices of the Division and distributed to all persons who have informed the Division in writing of their desire to receive such notice. The Division shall describe the mineral resource rights available for leasing, and state the last date, which shall be at least 30 days after the date the notice is posted, on which applications will be received.

(2) Applications for the mineral resource rights described in the notice shall be submitted in sealed envelopes labeled "Simultaneous Filing# date" on a form supplied by the Division, and shall be accompanied by the filing fee required by OAR 141-071-0420 and the advance rental required by 141-071-0600 and a stamped business reply envelope.

(3) All applications for the leasing of such mineral resource rights filed on or before the closing date stated in the notice shall be considered to have been filed simultaneously. Such applications shall be opened in the Division's Salem office at 10 a.m. of the first day following the closing date stated in the notice.

(4) After reviewing each application for compliance with the requirements of these rules, the Division shall select the successful qualified applicant by a random drawing which shall be held in public. Unless otherwise noted in the notice for simultaneous filing, successful mining lease applicants shall be required to comply with OAR 141-071-0520.

(5) After the awarding of mining leases or prospecting permits to the successful qualified applicants, all rental checks shall be returned to the unsuccessful applicants, together with a list of the successful applicants.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

Competitive Bidding

141-071-0545

Competitive Bidding

Upon a determination that mineral rights lying near a discovery site are not leased or subject to application under OAR 141-071-0535 or 141-071-0485, the Division may offer one or more parcels not exceeding 640 acres each for competitive bidding, by sealed bids or at oral public auction, to the bidder offering the highest bonus in addition to the minimum annual rental.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0550

Notice of Bidding

The Division will publish a notice of opportunity to bid for leases within the discovery area in a newspaper of general circulation in the county or counties where the discovery is located. The Division will provide written notice to any person or organization which has requested in writing of the Division that such notices be provided to it directly.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0555

Contents of Notice

The notice will specify the time and place of bid opening, the manner in which bids shall be submitted, a description of the mineral rights in each bidding unit, and the terms and conditions of the lease, including royalty and rental rates. The notice will also state that a proposed development and operations plan and an environmental analysis of development and production alternatives will be required before a lease can be issued.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0560

Bidding Requirements

Each bidder shall submit with his bid an application to lease mineral rights, the filing fee required by OAR 141-071-0420, and a certified or cashier's check, bank draft, or money order in the amount of one-half of the amount of the applicant's bonus bid.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0565

Opening of Bids and Award of Leases

The following procedures will be employed in opening bids and awarding leases:

(1) All bids received within the deadline stated in the notice shall be opened and announced at the place, date, and hour specified in the notice. No bids will be accepted or rejected at that time.

(2) The Division shall have the right to reject any and all bids submitted. Incomplete and non-conforming bids shall be rejected and the bonus bid deposits thereon returned.

(3) Within 30 days of the bid opening, or such longer periods as may be specified in the notice of bids, the Director shall award a lease for each bidding unit to the qualified applicant who is highest bidder. If the Director does not award a lease within the required period, all bids shall be considered rejected.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0570

Oral Bidding Procedure

Oral bidders will be required to conform to specific directions published in the bidding notice. Within 30 days of the oral bidding, or such longer periods as may be specified in the notice of bidding, the Director shall award a lease for each bidding unit to the qualified applicant who is highest bidder. If the Director does not award a lease within the required period, all bids will be considered rejected. OAR 141-071-0575.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0575

Lease Execution

If a lease is awarded, a form of lease shall be sent to the successful bidder, who must execute it within 30 days of receipt, pay the first year's rental, and pay the balance of (his) bonus bid. Within 120 days, and prior to commencing the operations under the lease, the lessee shall file the corporate surety bond required by the Division, file evidence of required insurance, and file completed agreements for environmental protection and surface management.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0580

Forfeiture of Competitive Bid Leases

If a successful bidder fails to execute the lease or otherwise fails to comply with these rules, his deposit will be forfeited and the bidding unit will be reoffered for competitive leasing.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0585

Restoration of Bidding Units

If no bids are received on a bidding unit, the Division, at its discretion, may offer the lands and mineral rights for non-competitive leasing.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

Lease Terms

141-071-0590

Mineral Lease Form

Generally, the Division of State Lands mining lease form (OAR 141-071-0690) as adopted and currently in use will be issued upon approval of a lease application. Modifications and additions of lease terms deemed necessary by the Division shall thereafter be included in each lease issued for the same parcel.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0595

Term of Lease; Renewal

(1) Mineral leases shall have a primary term of ten years, commencing with the date of execution.

(2) If royalties from minerals produced during any year of the primary term or a succeeding ten-year term equal or exceed twice the annual rental due under the lease, the lessee may renew for successive ten-year periods up to a maximum of 50 years.

(3) In no event shall a lease continue beyond the period of 50 years from the date of execution, except that the lessee shall have a right of first refusal in the event that the Division decides to continue leasing the premises.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0600

Rental Rate

Rentals at the rate of $1 per acre per year shall be due and payable in advance on or before the annual anniversary of the effective date of the lease. Rentals paid each year will be deducted from royalties due accruing during the rental year.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0605

Development Requirement

The operations contemplated in each lease shall be carried on with due diligence and in a workmanlike manner. Lessees will conduct such examinations, explorations, testing, and samplings as may, in competent judgment, be necessary to determine the extent, quality, feasibility, and economic potential of the mineral resource in, upon, and under the leased premises, together with such other studies as may be necessary for it to reach a determination as to development methods, preparations, equipment, and mining of the leased premises:

The lessee shall expend for approved development work within the times and in the amounts as follows:

(1) According to the total number of acres covered by advance rental payment each year under this lease, prior to the end of the first year of each mineral lease -- an amount equal to the total number of acres leased in each lease multiplied by $1; and

(2) Prior to the end of second year of each mineral lease -- an additional amount equal to the total number of acres in possession under each lease at the beginning of the second year multiplied by $2; and

(3) Prior to the end of each subsequent year of each mineral lease -- an additional amount annually equal to the total number of acres in possession under each lease at the year's beginning multiplied by $3.

(4) Development work or improvements, to be acceptable, must contribute directly to the mining or mineral potential of the property.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0610

Royalties

All valuable minerals and specific materials removed by any person from lands or mineral rights subject to ORS 273 .780 shall be subject to payment of royalties to the Division of State Lands in accordance with these rules, except that any person may remove minerals, sand and gravel, or rock materials in quantities not exceeding ten yards per year without payment of royalties. Royalties rates shall be charged upon the gross value of the minerals removed from the lease premises and sold or otherwise utilized by the lessee during each month of the lease, as follows:

(1) For metallics and uranium -- 5 percent.

(2) For non-metallics except those covered by OAR 141-014-0300 through 141-014-0370 et seq., sand, gravel, and rock -- A rate per ton to be determined by the Director to be fair and reasonable under the particular lease to be issued.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0615

Measurement

The lessee shall accurately measure or gauge the quantity and quality of all production in accordance with the standard practices, procedures and specifications used in the industry.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0620

Basis of Value

The value of minerals or specified materials shall be determined by the gross market value at the mine mouth. In the event that minerals are not sold in raw form but are furnished to a plant owned or controlled by the lessee, the gross market value may be determined by an appraisal of values for minerals of like quality and quantity. Should the Division believe that any charges imposed and deducted are excessive or that the price received by lessee is unreasonable, lessee shall, upon 30 days written notice, produce evidence that the charges or price or both comply with the above requirements.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0625

Commingling

All production shall be maintained segregated until an approved system of measurement has accounted for the quantity and quality of the leased minerals. Approval may be obtained to commingle production upon proof that royalty payable to the state shall not be diminished.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0630

Assignment

(1) A mineral lease shall not be assigned, in total or in part, without written approval of the Director.

(2) Each request for total or partial assignment of lease must be accompanied by the following:

(a) A completed "Assignment of Lease" form (available from the Division);

(b) A fee in the amount of $50 payable by check;

(c) If a corporation, written verification that the assignee is registered to conduct business in Oregon. Registration must be through the Corporation Division, Secretary of State's Office, Salem, OR 97310.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77; LB 1-1981, f. & ef. 6-19-81

141-071-0635

Surface Management

In all leases where the state has no interest in the surface estate, the lease shall contain the following provision for protection of the surface owner:

Unless waived in writing, the lessee shall annually pay to the surface owner a sum equal to the amount of damages sustained by the surface owner for loss caused by mining activity. The amount of damages may be determined by any formula mutually agreeable between the surface owner and the lessee.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0640

Reclamation

It shall be a continuing obligation of the lessee to pay the cost of the surface reclamation necessitated by that lessee's mining operation. This obligation as to state-owned land or mineral rights shall not be limited by the bond limitation required under ORS 517.810. If a lessee fails to begin reclamation of the leased premises as scheduled in the plan required under OAR 141-071-0520 or within one year after termination of the mining operation, the Division may conduct such reclamation operations as it finds necessary and levy the costs thereof as a charge upon the lessee. Such action shall not preclude any other action at law by the state.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0645

Relinquishment

(1) A mining lease, or any portion of the mineral rights covered by such lease, may be relinquished by the lessee by filing a written statement with the Division which:

(a) Describes the mineral rights to be relinquished by legal subdivision or survey;

(b) States that the land surface above the mineral rights have not been disturbed, drilled, mined or otherwise affected, or if disturbed or otherwise affected, describing the manner in which such lands were restored to their original condition;

(c) States that all monies due and payable to workmen employed by the lessee on the leased premises have been paid;

(d) Is accompanied by a release from the State Department of Geology and Mineral Industries of Mined Land Reclamation Act permit.

(2) A relinquishment shall take effect upon approval by the Division, subject to the continuing obligation of the lessee and the lessee's surety to pay all accrued rentals, royalties and taxes, if any, and to comply with all conditions of the lease and of these rules related to the restoration of the leased premises.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0650

Investigation of Leased Premises

The Division may conduct scheduled and unscheduled inspections of operations conducted by the lessee under a mining lease. Upon receipt of a complaint related to the conduct by the lessee of its mineral resource exploration, development, or production, the Division or any governmental official appointed to the task by it may make an investigation and collect facts and opinions.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0655

Suspension of Operation

Upon the occurrence of any of the following events, the Director may issue an order suspending operations under a mining lease executed by the Division:

(1) Violation of the regulatory requirement of the Oregon State Department of Geology and Mineral Industries, the Oregon Department of Environmental Quality, the Division of Employment, Bureau of Labor, Workmen's Compensation Board, Public Utility Commissioner, Department of Revenue or other authority having jurisdiction, in excess of 30 days after notice in writing from any such agency, except that requirements undergoing further consideration or reconsideration by such agency, or appeal to the courts of such agency's decision, shall allow continued operation of the leased premises.

(2) Any violation of the terms and conditions of a mining lease which, in the judgment of the Director, jeopardizes the environment, public health, welfare, or safety of the State of Oregon.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

141-071-0660

Cancellation of Mining Lease

The Division may commence proceedings to cancel a mining lease if:

(1) A lessee is in continued violation of terms and conditions of the lease including but limited to the requirement thereof to exercise due diligence in exploring, developing, and operating under the mining lease, beyond 30 days after receipt of notice in writing of such violation from the Division.

(2) The lessee submitted false information in its application or in any other document required to be submitted to the Division; or

(3) The lessee has changed its method of exploring, developing, or producing mineral resources under the lease without first securing the approval of the Division.

Stat. Auth.: ORS 273
Stats. Implemented: ORS 273 .780 - ORS 273 .790
Hist.: LB 44, f. & ef. 8-16-77

The official copy of an Oregon Administrative Rule is contained in the Administrative Order filed at the Archives Division, 800 Summer St. NE, Salem, Oregon 97310. Any discrepancies with the published version are satisfied in favor of the Administrative Order. The Oregon Administrative Rules and the Oregon Bulletin are copyrighted by the Oregon Secretary of State. Terms and Conditions of Use

Oregon Secretary of State • 136 State Capitol • Salem, OR 97310-0722
Phone: (503) 986-1523 • Fax: (503) 986-1616 • oregon.sos@state.or.us

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